Internal auditors can help companies obtain a holistic and accurate view of their activities by helping to properly implement the European Commission’s new non-financial reporting Directive, said ECIIA Vice President Farid Aractingi at a recent conference organised by ECIIA, ACCA and Ecoda.
“Internal auditors partner with external assurance providers to ensure that engagements are performed efficiently, reliably and cost-effectively,” said Aractingi. “Therefore, they are in a good position not only to help implement the non- financial reporting system but also to ensure that it is not just a box-ticking exercise.”
He added that internal audit’s independence gave it the capacity to say things “bluntly but calmly.” For companies to create successful non-financial reporting practices, internal auditors would need to help develop the appropriate framework and define the KPIs to be included in the report. There is no “one-size-fits-all” solution to the directive, he said.
Nicolas Bernier-Abad, DG FISMA at the European Commission, explained to the conference that the aim of the directive was not to create a new report, but enhance the content of existing management reports on a range of issues – including the environment, social obligations, corruption, bribery and human rights.
“The directive should help explain to the owners of the company what is going on in the business,” he said. “It is necessary to talk about these things in the same way as talking about profit and loss.”
For a report of the conference, click here.